HAMBURGER TAX INCOME UP BY 5%
By Amy Riggin/OF THE COMMERCIAL STAFF
Pine Bluff Convention Center Director Bob Purvis said advertising and promotion taxes for 2008 came in nearly 5 percent above projections at $1.5 million — about $239,000 from hotels and $1.26 million from restaurants.
Nearly all of the funding for the center — 91 percent of its budgeted revenue for 2009, to be exact — comes from the A&P tax (commonly referred to as the “hamburger tax,”) collected by the city’s restaurants and hotels.
“This has been a good year,” he said. “I think part of the reason for that is people are staying closer to home.”
Careful budgeting
Despite higher-than-expected tax revenue in 2008, the Advertising & Tourist Promotion Commission and the Civic Auditorium Complex Commission decided during its joint meeting last month to be conservative when budgeting for 2009. Commissioners approved a budget that expects $1.48 million in A&P taxes, which is just 3 percent more than last year’s budgeted tax revenue.
“I think money is going to be tight this year,” said Purvis. He said budgets haven’t changed much for a lot of convention centers in Arkansas, based on conversations he has had with other directors, who “are not projecting increases either.”
A second source of revenue comes from building usage, which is projected for 2009 to bring in $127,500, 14 percent less than last year’s budget. Revenue from concessions and catering are expected to remain flat this year at $12,000.
With such a substantial amount of its funding coming from the A&P tax, Purvis and his staff have become more diligent in trying to collect the taxes.
“When the economy gets tight, often what you see is people getting late with their taxes,” Purvis said, adding, “We started this year being more aggressive on the enforcement end of sales tax collections. We have a new procedure in place and it seems to have helped.”
When businesses are one day late, Purvis sends a letter politely reminding them that the tax is due. When they become 31 days late, a second letter is sent that is “a little more stern and to the point.” After 61 days, businesses are notified of the center’s intent to file a lien for judgment against their property, Purvis said. At that point, businesses have 10 days to respond.
“We have filed a couple of liens this year,” Purvis said.
Accruing interest
Another factor is that interest starts to accumulate once taxes are late — 10 percent the first day and 5 percent per month cumulative for 30 days or more, with a cap of 35 percent.
Last week, the convention center reported that letters had been sent to six delinquent businesses that had taken no action. But by Wednesday the number had dropped to three:
Questions at Domino’s were referred to owner Michael Collins, who did not return a call seeking comment. Tony Dowd, owner of Ynot, also did not return calls.
Edwin Foots, who said his wife, Gladys Foots, owns Marie’s, said the restaurant owed “nowhere near $5,000,” but said Wednesday that the taxes would be paid nonetheless.
“I intend to take care of my taxes Friday morning,” he said. “They will be taken care of before they close down at the tax office.”
As for why the restaurant was delinquent, Foots said, “It’s been slow, the economy, and we’re just trying to hang in there.”
Drawing crowds
Purvis said the revenue, in addition to maintaining the building, staff and other costs, helps the Advertising & Tourist Promotion Commission to recruit events all over the city, not just at the convention center.
For instance, the commission spent $87,000 of the $102,000 budgeted last year on inducements for various events. Put simply, the use of inducements is necessary because it takes money to make money. Purvis said the commission often will offer to share some of the costs for an event or to make improvements at a facility to entice organizers to hold the event there.
The following is a breakdown of 2008 inducements:
State High School Basketball (ACAA) - $4,031 ($4,500 budgeted)
Ben Pearson Archery Tournament - $2,000 ($2,500 budgeted)
Softball & Baseball - $11,900 ($20,000 budgeted)
Kickoff Classic - $10,000 ($10,000 budgeted)
Square Dance - $2,000 ($2,000 budgeted)
4th of July Fireworks - $5,000 ($5,000 budgeted)
Blues Festival - $5,000 ($5,000 budgeted)
Smoke on the Water - $5,000 ($5,000 budgeted)
Contingency - $42,142 ($46,000 budgeted)
Inducements
The commission also budgeted $2,000 last year in inducements for the Pine Bluff Film Festival, which was not held, and has kept the same amount in this year’s budget.
Purvis said inducements pay for things like trophies for softball and baseball tournaments, bids on tournaments and equipment for sporting and other events. About $25,000 came out of the contingency inducement fund in 2008 to rebuild the dugouts at Pine Bluff Regional Park’s softball fields. This year, Purvis said the commission plans to put some of those funds toward baseball, with improvements at Taylor Field.
“We will actually pay for the cost of those things to get them to hold the events in Pine Bluff,” he said. “What we really think we can continue to do in Pine Bluff are conventions and athletic events.”
In fact, Greg Gustek, director of the Pine Bluff Convention & Visitors Bureau, said he was contacted recently by Cabela’s Inc. According to its Web site, Cabela’s is a leading specialty retailer and the world’s largest direct marketer of hunting, fishing, camping and related outdoor merchandise and is headquartered in Sidney, Neb.
“We have signed up to bring a qualifying (fishing) tournament on Sept. 19 here to Pine Bluff on the Arkansas River,” Gustek said. “I was tickled to death that they contacted us because that will tie Pine Bluff in with a big name.”
The Cabela’s King Kat qualifying tournament, he said, hopefully will lead to bigger and better tournaments in the future.
“Now I can work on getting either the crappie tournament or maybe their bass tournament,” Gustek said. “We will be the last qualifying tournament before they have their (King Kat) Classic. But this gives me a chance to get the Classic ... so we would have a chance to have a big crowd and it will make us nationally known.”